WTI crude oil is forming a new trend as it makes higher lows and higher highs inside an ascending channel on its 1-hour chart. Price just bounced off the top and looks prime for a pullback to support.

Price is testing the 100 SMA dynamic support, though, and keeping gains in check could push the commodity back up to the channel top around $50-51 per barrel. A larger pullback, on the other hand, could spur a test of the channel bottom at $47 per barrel near the 200 SMA.

The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The gap between the moving averages is widening to reflect strengthening bullish pressure also.

However, RSI is heading south so price could follow suit while sellers have some energy left. Stochastic is also heading lower to confirm the presence of bearish pressure, but both oscillators are nearing oversold levels. Turning back up from that area could draw buyers back in the game and allow the uptrend to resume.

Crude oil appears to be drawing support from improving risk sentiment related to the possibility of the Fed keeping borrowing costs mostly unchanged for the rest of the year and optimism for the upcoming trade talks.

Mid-level trade negotiations are set to happen between the US and China later this week and more progress since their 90-day truce on tariffs could be bullish for commodities. On the flip side, more tensions could bring risk aversion back to the financial markets and weigh heavily on sentiment.

Apart from all that, US inventory data could also do a number on crude oil prices, although it’s also worth noting that the OPEC output deal is already in force.